Can you trade forex with 100% success with technical indicators alone?

After so many years involved in forex trading and keep learning new things - I've covered most of the aspects of currency markets from technical analysis, fundamental analysis, currency correlations, and self styled trading. They are not just knowledge in the books but also tested on the real live trading platforms. It feels like the more you know - the less you trust the so called experts, although they have contributed to some of the most successful trading style but eventually you will discover the flaws within their systems. No matter who they you will end up disappointed. Why? Because we all lack the understanding of the very fundamental of how the forex market works - I have come of age and knowing a little bit of the currency trading basic idea suddenly I am taken aback how dangerous it can be - even the experts will fall only a few or perhaps none have succeeded. The winners are the market maker because they have the power and knowledge of data to manipulate the market to their advantage.

 
But today I am not gonna discuss about how the forex market works but technical analysis. The question is can we trade successfully using technical indicators alone? I am pretty sure some people have tried and I have done that myself as well for quite sometimes and the answer is simply NO. If you study closely almost all 95% of technical indicators are made based on the same principle which takes the average for example MACD, Stochastic, Moving Average, ADX, momentum indicator, etc. The reason of taking the average is simply that we can view the simplified version of the market movement - anything that move beyond the average have the tendency to retrace back to the average line. Either up or down outside the average line can be considered noise - and eventually it will returns for correction. This can easily be seen on the Bollinger bands where market moves either on the bottom, middle, or the upper line bands. 

 
Usually I will use MACD (moving average convergence / divergence), Stochastic, and Bollinger bands to analyze the market. Although they are based on the same principles (average) but they have different timing and perspective. For example MACD is usually lagging behind the real market movement - when the market reverse direction MACD still continue moving on its path. So if you are solely depending on the MACD you are always late catching up with the real movement and earning very small amount of pips in the process. MACD will make you lose during corrections / retracement trades especially in smaller time frames like 5 minutes or 15 minutes. See below the MACD not yet diverge down but the market already move down.

Stochastic is the opposite of MACD and it is one of the leading indicator it moves almost parallel to the real time market movement. However that does not means if you place your position according to the Stochastic you can harvest every pips on the twist and turns of its convergence / divergence. Most often you will get fakes movement and taken by surprise almost every time. This will kill your emotions without failed. See below stochastic fake movement is the real killer that taken most traders by surprise.

Therefore after many years of trading I prefer to use combinations of both - the success rate increase significantly using both especially when display in one window screen. The reason being is because both will provides you average of fast and slow which means you are trading in between. This can be seen when both MACD and Stochastic move in line the market is almost certain heading in its directions. See below when MACD and Stochastic in synced the market move following the direction.

Now the accuracy of these two indicators nearly perfect - can it be reliable? Not yet - because it keeps moving and we don't know when it going to stop. If you just keep opening position hoping to harvest every pips on the twist and turn you will fail. As it can't be just keep moving without a stopping point, remember the forex market fluctuates and the market makers play games without us all (small traders). 

Therefore to estimate the limits of fluctuation I usually use the Bollinger bands. Some people will use support and resistance level using estimate from historical data of the previous range. It actually pretty much the same but I prefer to use Bollinger bands as it is easier visual display rather than having to draw the line manually every time. Take a look at the picture above where the fluctuation occurs mostly within bottom, middle, top. Usually I will trade at the bottom or top and rarely the middle because it is still much riskier. If you trade at the bottom and top your losses also smaller especially combined with synced MACD / Stochastic.

Apart from MACD, Stochastic, and Bollinger Bands - Different time frames also equally important. Larger or the highest time frames rule over the smaller time frames. That's why it's very important to have a multiple screens in one window to view all the indicators' behavior in one windows. That's what I like about oanda fx platform providing multiple charts display in one window.

So if both MACD and Stochastic moving in line (up) for example in monthly time frame - that signaled a strong moving upwards that will last for a couple of months perhaps 2 months to say the least and it can go up to average of 5 months and more. This can boost your confidence and lessen  your worries -- although there maybe downward movement but those are just temporary corrections as long as the direction not yet touching the top of the Bollinger bands it may keep going up. See the picture below

So in technical analysis combination of MACD, Stochastic, Bollinger Bands, and Time Frames view are good enough to provide 70% accuracy. It covers almost every aspects of it and if the currency market is solely based on these mathematical formula the chances of winning would be much more significant. 

However to be successful in the forex market requires more than that besides luck - an in depth understanding of how it works is the most important matter. It might scare and discourage you after you know the deep knowledge of it. The currency market is not about technical indicators although the market behave accordingly but it is based on the landscape of trading behavior. For example an excessive overbought might trigger excessive corrections until eventually it rest on the average and that process of corrections no one knows when it will come. You will not be able to wait...until you close a losing position it suddenly trigger the market to normal its normal path ;). This you should know....